Australia-listed casino investor Frontier Capital Group Ltd said on Monday that it is still seeking funds to meet the escrow requirements of the Philippine Amusement and Gaming Corp (Pagcor) with respect to the firm’s Casablanca Casino in the Clark Freeport Zone, in the Philippines.
In February 2016, Frontier Capital acquired Stotsenberg Leisure Park and Hotel Corp, an entity controlling a gaming property called Hotel Stotsenberg and Casablanca Casino (pictured). The deal was done for a total consideration of US$26 million, according to previous filings.
Casino operations at the property have been suspended since the first quarter last year, as the company is required by Pagcor to settle an escrow account in the amount of PHP225 million (US$4.5 million), Frontier Capital confirmed in Monday’s filing.
According to previous filings, the escrow account “provides security that the casino remains committed to further development … and compliance of all regulations as determined by Pagcor”.
The escrow amount was originally covered by a bank guarantee, which has lapsed, said Frontier Capital. The firm said it now intends to secure the escrow “with a cash deposit”.
“The company continues to seek the necessary funds [to settle the escrow account],” said Frontier Capital in Monday’s filing.
The trading of Frontier Capital’s shares on the Australian Securities Exchange has been suspended since February 15, 2016. Trading is expected to resume once the company settles the escrow account and resumes operations at Casablanca Casino, the company had said.
The operation of the 239-room hotel has not been affected, according to Frontier Capital.
On Monday, the company released the preliminary results for the year ended December 31, 2016. It said the information was delayed “due to the complexity and inherent uncertainty of completion of a transaction to meet Pagcor’s requirements”.
For full-year 2016, Frontier Capital recorded a net loss of AUD41.4 million (US$32.8 million), including a goodwill impairment of AUD39.1 million related to the acquisition of Stotsenberg Leisure Park and Hotel Corp.
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"The President [Rodrigo Duterte] had already decided and announced that no construction of a casino on Boracay will be allowed”
Secretary Eduardo Año
Officer-in-charge at the Philippine Department of Local and Interior Government